The Agency-Selection Process Needs Fixing Now

It Must Become More Than a Transaction If Marketers Are to Reap Better Results

Two things are for sure: Marketers are facing an increasing headwind as the economic downturn poses daily challenges. And the consumer is surprisingly resilient and holding -- but for how long, with food prices rising and gasoline at $5 a gallon? If the consumer retreats, marketers will search for solutions outside of their agency rosters, hoping to reinvigorate sagging sales and earnings reports with new ideas and energy.

Yet, although this is one of the most important decisions a CMO will make during his or her tenure, the agency-selection process is highly inefficient and dysfunctional. The proof in the pudding: Marketers' agency relationships are becoming dangerously transactional, lasting a mere three years on average.

The system needs fixing and must be vastly improved if marketers are going to benefit from a better, more-stable relationship that yields better business results.

That said, here are some thoughts for marketers.

DON'T SELECT AN AGENCY BASED ON REPUTATION ALONE

Good, smart agencies know how to manufacture their reputations. Instead of going by reputation, measure an agency's effectiveness simply by finding out how many additional assignments from existing clients it received in the past five years and how many clients it lost during that time. An agency that wins a lot and loses a lot will be a bad partner. It means it places its focus on pitching new business, not on servicing existing clients. You want to work with an agency that has many happy, stable and long-lasting clients.

DETERMINE THE AGENCY'S EMPLOYEE TURNOVER RATE, ESPECIALLY AMONG YOUNG PEOPLE

This will give you a sense of morale and a sense of whether the agency is paying a competitive salary. Find out if the agency has a formal training program and evaluate it. That will give you an idea as to whether the agency will be able to scale to the demand of your business in the future. Find out the agency's hiring philosophy and practices and whether those create a culture of creativity and innovation. Find out how diverse the agency is in terms of race, gender and ethnic background. Diversity breeds a stimulating and creative culture.

FORGET ABOUT 'MEETING THE TEAM'

It is not as important as you think. Many marketers insist on that at the expense of meeting senior management, believing that senior management will disappear after the pitch. They will if you let them, but if you insist they stay involved, or if you make it worthwhile for them to stay involved (by buying great work or by compensating them at a premium), they will be involved. And would you rather be serviced by a bunch of middle managers who do not have the authority or power to make decisions or by experienced senior mangers who are more likely to make sure that you get the best agency resources? So when you are advised to "meet the team," make sure that the team includes the agency CEO and top managers.

AND FORGET ABOUT 'LEVEL PLAYING FIELD'

The playing field is never level in the real world, so it shouldn't be so in a pitch. You want to identify the smarter, more-aggressive agency, the one that will help you win in the marketplace and further your company's business interests.

ABOUT THE AUTHOR

Avi Dan is a marketing consultant with 30 years' experience in business, brand and strategy for flagship consumer brands who specializes in business development for communications and marketing-services companies.

So avoid a complicated process and focus on ideas and outcomes. Start with a manageable, selected group of agencies that are best suited to the task (and have a search consultant draw up a list of appropriate suitors and how to go about engaging them); give them an assignment and a time frame; and sit back -- let them decide how they are going to solve the problem, how they are going to get you involved. You will learn more about them this way and make a smarter decision.

'A CAST OF THOUSANDS' NEVER MAKES A SMART CHOICE

Layers of people don't always reach the best results when selecting an agency. Yet new-business committees tend to be bloated because watching agencies present is "fun" or for internal reasons that have little to do with the review. The agency-selection process is highly emotional because of its public nature. Only senior people with experience, self-regard and confidence are best suited to make the right decision. The CMO and a few lieutenants -- and the CEO, if possible -- are the best people to make the decision. The role of the CEO, throughout the process, is particularly important. Time after time throughout my advertising career, I found that when the CEO is intimately involved with the agency, results tend to be better.

ASKING FOR CREATIVE IS A BAD IDEA

A good portion of creative shown in reviews never sees the light of day -- and for good reason: It was artificially developed in a cocoon without deep client participation and input. So a good creative idea in a pitch could be pure luck. It burdens an agency's resources, and agencies resent having to develop speculative work without being compensated for it.

So why ask agencies for creative? Marketers often say, "We want to see how they think." That makes sense, but why not put the emphasis on how the agency thinks strategically, not on how it executes? An agency's planning process and how it goes about intellectual solutions will reveal more about it and whether it would be a good partner. Having confidence in an agency's strategic ability means it will come up with a solution and results every time, not just during the pitch.

BEFORE YOU CHANGE AGENCIES, CHANGE THE AGENCY

Changing agencies has its downsides, though sometimes it's entirely understandable. It can be emotionally difficult to work with people who have stopped caring. Yet the benefit of putting an account into review and finding a passionate new partner sometimes isn't worth the risk of losing institutional knowledge about the business stored at the agency. Sometimes it's better to ask agency management to change some or all of the people on your business (or even examine shortcomings on the marketer side to inspire the agency) as a more-effective way to reignite the love affair. Changing agencies is risky business. It often leads to superfluous change in strategic direction, fragmented messaging and consumer confusion. Handle with care.